Bills Digest no. 90 2015–16
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Paula Pyburne
Law and Bills Digest Section
26 February 2016
Contents
Purpose
of the Bill
Structure of the Bill
Background
Rationale for the Bill
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Concluding comments
Date introduced: 11
February 2016
House: House of
Representatives
Portfolio: Social
Services
Commencement: Sections
1-3 on Royal Assent; Schedule 1 on the 14th day after Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the Business Services Wage Assessment Tool
Payment Scheme Amendment Bill 2016 (the Bill) is to amend the Business
Services Wage Assessment Tool Payment Scheme Act 2015 (BSWAT Act)[1]
to:
- increase
one-off payments from 50 per cent to 70 per cent of the difference between the
actual wage paid to an eligible person and the amount they would have been paid
had the Business Services Wage Assessment Tool (BSWAT) productivity-only
component been applied
- provide
a ‘top up’ payment for persons who have already received a 50 per cent payment
under the BSWAT payment scheme
- remove
the current compulsory requirement to obtain legal advice before any payments
are made
- extend
all relevant scheme dates by 12 months
- clarifying
certain administrative arrangements, and
- enable
a deceased person’s legal personal representative to engage with the payment
scheme on their behalf.
The Bill contains two Parts:
- Part
1 sets out the relevant amendments to the BSWAT Act and
- Part
2 contains application and transitional provisions.
The Australian Government funds organisations to provide a
range of employment services and support for people with disabilities. Relevant
to this Bills Digest, one form of employment services for people with
disabilities is supported employment services that provide support to,
and employment for, people with disability within the same organisation.[2]
Supported employment services are provided through organisations known as
Australian Disability Enterprises (ADEs).
Australian Disability Enterprises are generally not for
profit organisations funded by the Department of Social Services that employ
and support people with a disability, often in specialist working environments,
work crews or contract labour arrangements within a commercial context. Work is
undertaken in areas such as packaging, assembly, production, recycling, screen
printing, plant nursery, garden maintenance and landscaping, cleaning services,
laundry services and food services.[3]
Currently, around 20,000 people with moderate to severe disability are employed
by ADEs.[4]
Supported employees are paid a reduced (pro rata) wage
intended to reflect their productivity and competence in performing a job. The
level of the reduction is determined using a wage assessment tool stipulated in
the Supported Employment Services Award 2010.[5]
One of those tools is the Business Services Wage Assessment Tool (BSWAT).
The BSWAT was introduced in April 2004 and has been used to
assess the wages of some 15,000 workers in Australian Disability Enterprises.[6]
Around half of supported workers had their wages assessed using the BSWAT,
making it the most commonly used assessment tool. The BSWAT is comprised of two
components. The first is a productivity component intended to assess a worker’s
output compared with a person who does not have a disability (based on an
industry benchmark or a comparator).[7]
The second is a competency component, which is intended to
measure an employee’s value to an organisation against a broader set of
standards (or competencies) than can be obtained by simply measuring their
capacity to perform the tasks associated with a job. Under the BSWAT, the
productivity and competency components were scored separately and the results
combined to determine the person’s pro rata wage rate.[8]
The rate was then applied to the most appropriate level of the most relevant
award. It is the competency component of the BSWAT that was the basis of
contention before the Full Court of the Federal Court in the case of Nojin v
Commonwealth.[9]
Federal Court case
The case was brought under the Disability
Discrimination Act 1992. Essentially, the Court declared that the
employers of two men with intellectual disabilities, Mr Nojin and Mr Prior, had
unlawfully discriminated against them by imposing a requirement or condition
that, in order to secure a higher wage, they must undergo a wage assessment
through the BSWAT. The employers in both cases were Australian Disability
Enterprises, which were funded by the Commonwealth to provide supported
employment.
The Commonwealth agreed that if the employers were liable
for discrimination it would bear that liability[10]
in accordance with the terms of section 122 of the Disability Discrimination
Act.[11]
Essentially then, because the Commonwealth had devised the BSWAT and promoted
its use, it was liable.
Government response
On 21 August 2014, the Government announced that it would
provide $173 million to:
- ‘develop and implement a new productivity based wage tool (including
new assessments) for use across the supported employment sector’ and
- ‘assist ADEs with the additional wage costs associated with the
suspension of BSWAT’.[12]
In December 2013, lawyers Maurice Blackburn lodged representative
proceedings (commonly known as a class action) against the Commonwealth in the
Federal Court of Australia to ‘recover lost wages for more than 10,000 workers’.[13]
The proceedings allege unlawful discrimination against workers with
intellectual disabilities who work in Australian Disability Enterprises. The
action includes anyone who is an intellectually disabled worker who was
employed in an Australian Disability Enterprise (ADE) on or before 22 October
2013 and whose wage had been assessed using the BSWAT.[14]
On 21 December 2015, Maurice Blackburn
Lawyers announced an in-principle agreement to settle the class action.
The Bill is a direct response to the proposed
agreement which still requires Federal Court approval.
The BSWAT Act which was established in response to
the findings of the Federal Court in Nojin v Commonwealth commenced on 1
July 2015. It applies only to those persons who consider that their
circumstances are equivalent to those of Mr Nojin and Mr Prior. Accordingly the
BSWAT Act:
- established
a formal Payment Scheme whereby a claimant would be paid 50 per cent of the
wages the person would have received had the person’s wages been assessed using
only the productivity component of the BSWAT assessment less the amount of
actual wages paid
-
allowed people who believe they have been similarly discriminated
against to register their intention to apply for payment and to submit an
application for payment
-
provided a staged process for calculating the amount that a
person is eligible to be paid, offering to make the payment, allowing for the
acceptance or rejection of the offer and finally paying the agreed amount and
-
provided for strict timelines to apply at each stage of the
process.
As at 16 December 2015 the scheme had received more than
1,300 registrations.[15]
The Business Services Wage Assessment Tool Payment
Scheme (Consequential Amendments) Act 2015[16]:
-
amended the taxation law so that payments under the scheme would
be eligible income for the lump sum in arrears tax offset and
-
amended the social security law so that the payments would not be
income tested.
Introducing the Bill, the Minister for Social Services,
Christian Porter, stated:
On 16 December 2015, the Commonwealth announced that a
settlement had been agreed with the applicant in the representative proceeding
... before the Federal Court. The amendments in this Bill will give effect to
that settlement agreement.
If the Bill is passed, and the terms of the settlement are
agreed by the Federal Court, the representative proceeding will be dismissed by
the consent of the parties, and the supported employees concerned, along with
their families and carers ...
In essence the parties have agreed to settle if, amongst
other matters, the payments under the current scheme are calculated at 70 per
cent of the difference between the wages the person was paid and the wages that
would have been paid if only the productivity component of the Business
Services Wage Assessment Tool had been used ...[17]
Senate Standing Committee for
Selection of Bills
At its meeting of 24 February 2016, the Senate Standing
Committee for Selection of Bills determined that the Bill would not be referred
to committee for inquiry and report.[18]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills reported
on the Bill on 24 February 2016. The relevant comments are set out below under
the heading ‘Key issues and provisions’.[19]
At the time of writing this Bills Digest no comments had
been made in relation to the current Bill. However, Australian Greens Senator,
Rachael Siewert, expressed the following concerns about the Bill for the BSWAT
Act:
The
Greens still oppose this bill. We do not believe it is fair; we believe that it
in effect continues the discrimination that has occurred through this
particular tool. One of our concerns with the Bill is the fact that
people are forced to take one option or the other ... people should not be forced
to accept poor compensation for the loss, or underpayment, of wages or the loss
of opportunity those wages would have afforded them.[20]
At the time of writing this Bills Digest no comments
appear to have been made by stakeholder groups.
According to the Explanatory Memorandum to the Bill, its
financial impact ‘will depend on the number of individuals who apply for the
payment scheme, and the payment amounts determined for eligible applicants’.[21]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility
with the human rights and freedoms recognised or declared in the international
instruments listed in section 3 of that Act. The Government considers that the
Bill is compatible.[22]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights (Human
Rights Committee) commented on the Bill in its report of 23 February 2016 by
drawing attention to its earlier comments in relation to the Bill for the BSWAT
Act.[23]
In its report of 15 July 2014, the Human Rights Committee took the view that
the Bill for the principal Act engaged:
... the right to an effective remedy, the right to just and
favourable conditions of work and the right to equality and non-discrimination,
including the right of persons with disability to be recognised as persons
before the law and to the equal enjoyment of legal capacity.[24]
Adequacy of payment amounts
The Human Rights Committee drew
attention to Article 2 of the International Covenant on Civil and Political
Rights (ICCPR) which requires States Parties to ensure access to an effective
remedy for violations of human rights.[25]
States Parties are required to establish appropriate judicial and
administrative mechanisms for addressing claims of human rights violations
under domestic law.
The Human Rights Committee noted that the Statement of
Compatibility to the Bill for the principal Act did not provide any
‘substantive analysis’ about how the method for determining payments under the
Payment Scheme may be regarded as an effective remedy (understood as
being fair and reasonable compensation).[26]
In relation to the proposal to provide payments of an amount
equal to 50 per cent of what an affected person would have been paid had their
wages been assessed under the productivity component of BSWAT, the Human Rights
Committee notes that:
... to the extent that the payments provided for by the scheme
would be less than what an affected person would have been entitled to had
their wages been assessed by a non-discriminatory method, the bill may
represent a limitation on a person's right to receive fair and just
compensation for their work. However, the statement of compatibility provides
no assessment of this potential limitation on the right to work and rights at
work.[27]
Time frames
The Human Rights Committee was also concerned about the
‘strict time frames’ relating to registration, lodging an application,
acceptance of an offer and applications for review.[28]
The Human Rights Committee indicated that these timeframes may amount to
indirect discrimination, ‘to the extent that they may have a disproportionately
negative effect on people with an intellectual impairment’:
For example, such people may need more time and flexibility
in order to access necessary support and advice to facilitate the exercise of
their personal choice and control in responding to an offer. The strict
timeframes, and lack of opportunity for extensions to seek a review, may
therefore limit the right of such persons to enjoy legal capacity on an equal
basis with others, and to be provided with access to the support necessary to
exercise that legal capacity and to avail themselves of their rights. However,
the statement of compatibility provides no assessment of this potential
limitation of those rights.[29]
Changes to time limits
Currently the BSWAT Act sets out the process for
applying for a payment under the scheme and applies strict time frames to each
step as follows:
- a
person must register for the purposes of the scheme by 1 May 2016[30]
- a
person must make an application for payment on the approved form and in
the manner prescribed before 1 December 2016[31]
- a
person cannot make an application after 1 May 2016 if the person is not on the
register[32]
- a
person cannot make an application on or after 1 December 2016[33]
- if
a person makes an application before 1 December 2016, the Secretary must
determine the application by deciding whether the person is eligible for the
scheme, and if so, what amount (if any) to offer the person[34]—but
the Secretary must not determine an application made after that date[35]
- once
the Secretary has calculated the relevant amount, the Secretary must make a
formal offer to pay that amount[36]
or must formally refuse the application.[37]
However the Secretary must not make an offer or give a refusal to a person on
or after 1 September 2017[38]
- the
Secretary must not make an offer of payment or give a refusal to a
person on or after 1 December 2017[39]
- the
Secretary may, on written request, extend the acceptance period—but the
extension period must end on or before 31 December 2017[40]
- in
addition, the Secretary may, on written request extend the periods for applying
for a review of a refusal— but the extension period must end on or before 30
November 2017.
The Bill extends each and every time limit by 12 months so
that, for instance, a person must register for the scheme by 1 May 2017,[41]
a person who is not on the register cannot make an application on or after 1
May 2017,[42]
a person cannot make an application on or after 1 December 2017[43]
and all acceptances must be lodged by 31 December 2018.[44]
Change to amount payable
Currently, section 8 of the BSWAT Act sets out the
principles to be followed in calculating the payment amount for a
person. One of those principles is that the amount a person should receive, if
the person accepts an offer, should broadly reflect the amount that is 50 per
cent of the excess (if any) of a productivity-scored wage over an actual wage
which is then indexed. Item 7 of the Bill amends section 8 to increase
the percentage of excess from 50 to 70. The application provisions in Part 2 of
the Bill refer to this as the 70% amendment.
Effect of a persons’ death
Section 97 of the BSWAT Act currently provides that
the Act does not apply to a person who has died unless the person had made an
application for payment, and had not lodged an effective acceptance, before the
date of their death. Item 35 of the Bill repeals and replaces section 97
to allow the legal personal representative of a person who has died to do all
acts required by the Act on behalf of the deceased person, including
registering and applying for a payment under the BSWAT payment scheme.
Consequent upon this change item 6 of the Bill
inserts proposed subsection 6(5) which will ensure that a person who was
eligible for a payment before his, or her, death or who would have been
eligible if the BSWAT Act had been in force on the day he, or she, died
continues to be eligible.
Legal advice certificate
The BSWAT Act operates so that a person who wants
to accept an offer must do so in the approved form which must be
accompanied by all of the following:
- a
legal advice certificate
- a
financial counselling certificate
- an
acknowledgement that the person understands the effect of accepting the offer
and
- any
other information or documents prescribed by the rules.[45]
Section 36 of the BSWAT Act further requires that
the legal certificate which is to accompany the acceptance of the offer is in
an approved form, certifies any of the matters which are specified in the form
and is signed by a legal practitioner.
The Explanatory Memorandum to the original Bill states:
The applicant will have access under the scheme to legal
advice. The applicant will need to see a legal practitioner to seek advice on
the impact of receiving a payment under this scheme and whether the offer made
is consistent with the requirements of the Act. The form will set out the
matters on which a legal practitioner should provide advice to an applicant.
The legal practitioner will be required to certify that he or she has provided
advice. An applicant will be able to have his or her nominee present at this
meeting if he or she desires.[46]
However, item 29 of the Bill amends section 36 so
that it is no longer mandatory that the legal advice certificate is signed only
by a legal practitioner. Instead, the person, or the person’s nominee may also
sign the certificate. The rationale for this amendment is that it will:
... remove a current impediment to participants receiving their
payments quickly, especially for those who receive small offers of payment.
Access to these services continues to be funded under the scheme by the
Commonwealth, and the Government remains committed to ensuring people are able
to make informed choices about their access to payments as a result of
previously having been assessed using the Business Services Wage Assessment
Tool.[47]
Scrutiny of Bills Committee
comments
By way of context, the Scrutiny of Bills Committee first
noted that, in respect of the class action currently before the Federal Court
of Australia, class members have agreed to release the Commonwealth from
liability which may otherwise be established if the amendments are made and the
settlement is approved by the court. However the class members have the right
to opt out of the representative proceedings and commence their own legal
proceedings rather than accept an offer under the payment scheme created by the
BSWAT Act.
The Scrutiny of Bills Committee acknowledged that item 29
of the Bill removes the requirement that a person obtain legal advice from a
legal practitioner before he, or she, can make an effective acceptance under
the payment scheme. Although a completed legal advice certificate (under section
36 of the BSWAT Act) will still be necessary, it need only be completed
by a legal practitioner if the person elects to receive legal advice.
The Scrutiny of Bills Committee concluded:
The key change made by item 29 is thus to make legal advice
prior to electing to opt into the BSWAT payment scheme (and thus forgo the
right to pursue legal action) optional, not compulsory. The statement of
compatibility emphasises that this provides ‘greater choice and control to
applicants’ (at p. 2). The statement also suggests that making access to legal
advice voluntary will ‘reduce the red-tape burden on an individual applicant’
and that requiring legal advice ‘may be an impediment to the take-up of offers
under the payment scheme and, in any event, members of the representative
proceeding who choose to accept a payment under the scheme may not require
further legal advice’ (at p. 4).
The committee notes this advice, but is concerned about the
removal of the existing requirement for compulsory legal advice (freely
provided by the Commonwealth), especially as at least some persons affected
suffer from a variety of disabilities.[48]
That being the case, the Scrutiny of Bills Committee has
sought a more detailed explanation of this change from the Minister.
Application provisions
Items 37–39 of Part 2 of the Bill operate so that
the rules for working out a payment amount under section 8 of the BSWAT Act
apply the 70% amendment from the commencement day. For those
persons who have accepted an offer before the commencement day (that is, before
the 70% amendment comes into effect), the Secretary must, as soon
as practicable after the commencement day, work out the top up amount for the
person.
The effect of this Bill is to finalise the method of
calculating the entitlements of those persons who suffered discrimination
because of the application of the Business Services
Wage Assessment Tool. Entitlement will be based on 70 per cent of the
difference between the wages the person was paid and the wages that
would have been paid if only the productivity component of the Business
Services Wage Assessment Tool had been used.
It appears that if the Bill is
passed, and the terms of the settlement are agreed by the Federal Court, the
representative proceeding will be able to be dismissed by the consent of the
parties.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Business Services Wage
Assessment Tool Payment Scheme Act 2015, accessed 25 February 2016.
[2]. This
Bills Digest contains a brief background to the legislative changes in the
Bill. For the full background to the BSWAT Act see
L Buckmaster and P Pyburne, Business
Services Wage Assessment Tool Payment Scheme Bill 2014 [and] Business Services
Age Assessment Tool Payment Scheme (Consequential Amendments) Bill 2014,
Bills digest, 18, 2014–15, Parliamentary Library, Canberra, 2014, accessed
23 February 2016.
[3]. Department
of Social Services (DSS), ‘Disability
and carers: Australian Disability Enterprises’, DSS website, accessed 23
February 2016.
[4]. Ibid.
[5]. Supported
Employment Services Award 2010, accessed 23 February 2016.
[6]. Explanatory
Memorandum, Business Services Wage Assessment Tool Payment Scheme Bill 2014,
p. 3.
[7]. CRS
Australia, ‘About the Business
Services Wage Assessment Tool’, CRS Australia website (archived), accessed 23 February
2016.
[8]. Ibid.
[9]. Nojin
v Commonwealth of Australia (2012) 208
FCR 1 [2012] FCAFC
192, 21 December 2012, accessed 23 February 2016.
[10]. Nojin
v Commonwealth of Australia, paragraph 166, per Flick J.
[11]. Section
122 of the Disability Discrimination Act provides that a person who
causes, instructs, induces, aids or permits another person to do an act that is
unlawful under Division 1, 2, 2A or 3 of Part 2 of that Act is taken also to
have done the act.
[12]. M
Fifield (Assistant Minister for Social Services), $173
million to support employees in Australian Disability Enterprises,
media release, 21 August 2014, accessed 23 February 2016.
[13]. Federal
Court of Australia, Tyson
Duval-Comrie (by his Litigation Representative Claudine Duval) v Commonwealth
of Australia, file, VID1367/2013, Commonwealth Courts portal, 23
December 2013; D Harrison, ‘We’ll
give you half: Senate’s deal for underpaid intellectually disabled workers’,
The Sydney Morning Herald (online edition), 15 June 2015, accessed 23
February 2016.
[14]. Maurice
Blackburn Lawyers, ‘Workers with intellectual
disabilities class action’,
Maurice Blackburn Lawyers website, accessed 26 February2016.
[15]. C
Porter (Minister for Social Services) and A Tudge (Assistant Minister for
Social Services), Delivering
certainty for the supported employment sector, joint media release, 16
December 2015, accessed 23 February 2016.
[16]. Business Services Wage
Assessment Tool Payment Scheme (Consequential Amendments) Act 2015, accessed
25 February 2016.
[17]. C
Porter (Minister for Social Services), ‘Second
reading speech: Business Services Wage Assessment Tool Payment Scheme Amendment
Bill 2016’, House of Representatives, Debates, 11 February 2016, p.
7, accessed 23 February 2016.
[18]. Senate
Standing Committee for Selection of Bills, Report,
2, 2016, 25 February 2016, accessed 25 February 2016.
[19]. Senate
Standing Committee for the Scrutiny of Bills, Alert
Digest no. 2 of 2016, 24 February 2016, accessed 26 February 2016.
[20]. R
Siewert, ‘Second
reading speech: Business Services Wage Assessment Tool Payment
Scheme Bill 2014 [and] Business Services Wage
Assessment Tool Payment Scheme (Consequential Amendments) Bill 2014’,
Senate, Debates, 15 June 2015, p. 3335, accessed 26 February 2016.
[21]. Explanatory
Memorandum, Business Services Wage Assessment Tool Payment Scheme Amendment
Bill 2015, p. 1.
[22]. The
Statement of Compatibility with Human Rights can be found at pages 1–4 at the
end of the Explanatory
Memorandum to the Bill.
[23]. Parliamentary
Joint Committee on Human Rights, Thirty-fourth
report of the 44th Parliament, The Senate, Canberra, 23 February 2016,
p. 3, accessed 26 February 2016.
[24]. Parliamentary
Joint Committee on Human Rights, Ninth
report of the 44th Parliament, The Senate, Canberra, July 2014, p. 2, accessed
26 February 2016.
[25]. International
Covenant on Civil and Political Rights, done in New York on 16 December
1966, [1980] ATS 23 (entered onto force for Australia (except Art. 41) on 13
November 1980; Art. 41 came into force for Australia on 28 January 1994).
[26]. Parliamentary
Joint Committee on Human Rights, Ninth
report of the 44th Parliament, , op. cit., p. 3.
[27]. Ibid.,
p. 8.
[28]. Statement
of Compatibility with Human Rights, Explanatory Memorandum, Business
Services Wage Assessment Tool Payment Scheme Bill 2014, p. 1.
[29]. Parliamentary
Joint Committee on Human Rights, Ninth
report of the 44th Parliament, op. cit., p. 11.
[30]. BSWAT
Act, sections 13 and 14.
[31]. BSWAT
Act, section 15.
[32]. BSWAT
Act, subsection 16(2).
[33]. BSWAT
Act, subsection 16(3).
[34]. BSWAT
Act, section 17.
[35]. BSWAT
Act, section 18.
[36]. BSWAT
Act, section 19.
[37]. BSWAT
Act, section 20.
[38]. BSWAT
Act, subsection 21(2).
[39]. BSWAT
Act, subsection 21(3).
[40]. BSWAT
Act, subsection 22(2).
[41]. Item
15 of Part 1 of the Bill.
[42]. Items
2 and 18 of Part 1 of the Bill.
[43]. Items
1, 8 and 17 of Part 1 of the Bill.
[44]. Items
4, 14 and 31 of Part 1 of the Bill.
[45]. BSWAT
Act, section 35.
[46]. Explanatory
Memorandum, Business Services Wage Assessment Tool Payment Scheme Bill 2014,
p. 27.
[47]. C
Porter (Minister for Social Services), ‘Second
reading speech: Business Services Wage Assessment Tool Payment Scheme Amendment
Bill 2016’, op. cit.
[48]. Senate
Standing Committee for the Scrutiny of Bills, Alert
Digest no. 2 of 2016, op. cit., pp. 61-62.
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